As the second case in as many days, the US regulator sues Coinbase, intensifying the industry crackdown and perhaps upsetting a market that operates outside of the law.
Aiming at Binance, the biggest cryptocurrency exchange in the world, the U.S. Securities and Exchange Commission (SEC) launched a campaign against it on Monday. The CEO of Binance, Changpeng Zhao, is accused by the SEC of running a “web of deception.”
Anti-Crypto Campaign
The SEC’s legal actions might change the cryptocurrency market by establishing its authority over the sector, which has long contended that tokens do not qualify as securities and therefore not be subject to SEC regulation. Cryptocurrency intermediary Coinbase has made billions of dollars by acting as a middleman and avoiding transparency obligations.
SEC publishes 13 digital assets that were traded by Coinbase, costing the parent company’s shares 12.1% of their value and losing the company $1.28 billion in client influxes.
- SEC may establish cryptocurrency market authority over tokens, avoiding regulation.
- SEC reports Coinbase traded 13 digital assets, losing $1.28 billion, causing a 12.1% decline.
- SEC controls tokens, the cryptocurrency market, and unclear regulations, affecting security definition.
Paul Grewal, general counsel for Coinbase, stated that the business will carry on as usual and has “demonstrated commitment to compliance.” Some cryptocurrency traders have returned to Bitcoin as a result of the SEC’s assault on altcoins, as securities are strictly regulated and need thorough disclosures to alert investors to potential hazards.
The selling of tokens and other cryptocurrency products that pay interest is a particular area where the SEC has been attempting to exert its control over the market. Tokens do not fit the definition of security, according to crypto firms, and the SEC’s regulations remain unclear.
Beaxy Digital and Bittrex Global have also been sued by the SEC for failing to register as brokers, clearinghouses, and exchanges, respectively.
The SEC filed a lawsuit against Coinbase, a cryptocurrency exchange, alleging that it had inflated trading volumes, misappropriated customer cash, unlawfully combined assets, failed to bar U.S. consumers from its platform, and misled customers about its controls. In addition to the SEC filing a motion to freeze assets owned by Binance.US, its U.S. affiliate, Binance has promised to defend itself against the action.
